After criticizing several months of contracts with several international companies operating in rare earth metals, gold or coltan, Burundian President Évariste Ndayishimiye has ordered the suspension of all mining activities from these companies since July 14, pending renegotiation of the binding agreements. those, as the Minister responsible for mines confirms RFI.
“We are sitting on a real treasure!”, “The future is bright!” or even “Burundi will say goodbye to poverty!”: these are some of the mantras that regularly came to the mouth of the late Burundian President Pierre Nkurunziza during his last years in power, when he dangled in the income of his countrymen that they would soon benefit from the sale of minerals that “overflow” the Burundian subsoil.
To the Burundian authorities, Burundi is, in fact, just like its Congolese neighbor: “a geological scandal” that went unnoticed because their eyes were on the huge democratic republic of the Congo.
Nkurunziza regime will multiply the signing of contracts with foreign investors, including British Rainbow Rare Earths Ltd, licensed to exploit rare earths in the Gakara area, east of Bujumbura, 2015. Burundi then went through a severe crisis following Nkurunziza’s decision to move to the third term.
A company formed under Burundian law, Rainbow Mining Burundi, is formed. Multinationals hold 90% of the shares there and 10% go to the Burundian state in accordance with the country’s mining code. It will begin mining the Gakara deposit, which is presented as one of the most promising in the world thanks to its rare earth content, 2017.
Contracts are increasing, but not for the benefit of the local population
Burundi then places high hopes on this exploitation, the only one in Africa and one of the few outside China that has so far practically had a monopoly on the production of rare earths, which are used more and more in smartphones, TV screens, etc.
Since then, the Burundian government has increased the signing of agreements with Russian or Chinese interests, which will start mining companies according to Burundian law according to the model for Rainbow Mining Burundi: 90% of the shares for the foreign investor and 10% for He Burundian State, which sets its basement available and promises it in particular many tax benefits.
Tanganyika Mining will get a concession to mine Cimba gold in Cibitoke province (northwest), African Mining Limited to mine Muhwazi gold in Muyinga province (east), or Ntega Holding will mine colta in Runyankenzi in Kirundo province (northeast) ).
The Burundian population, 75% of whom live below the poverty line, is beginning to dream of better hands. But it will quickly become disillusioned, just like Burundian power.
“Since it began exploiting rare earths from Gakara (2017), Rainbow Mining Burundi (RMB) has already exported nearly 2,000 tonnes of rare earth concentrates,” said Ibrahim Uwizeye, Minister of Hydraulics, Mining and Mining. “The company told us that it sold each kilogram of concentrate for less than two US dollars per kilogram (…), I decided to suspend the export of 400 tons that had already been extracted while I waited for the verification of the regularity of these operations. . exports and that we move on to a better sharing even for what has already been exported “, he specified. “This review is a precondition for a renegotiation of the agreement which must follow immediately,” the Burundian minister added.
Ibrahim Uwizeye assures us that the same thing happened with the exploitation of gold or coltan: “the country is losing enormously, while relying on these revenues for its development”.
Signed in opacity
Since July 14, the minister has therefore ordered all these companies to suspend all their activities pending the renegotiation of these contracts “in a win-win spirit”, he explains. “We did not touch on their operator licenses, we just asked them to shut down their activities while they renegotiate the agreements,” he insisted.
“Everyone realized that Burundi, for example, for the financial year 2020-2021 counted on the equivalent of 3 million USD as resources from mining, and this figure was halved for the current year, where only an income of 1.5 million USD is expected,” explains Gabriel Rufyiri, founder by Olucome in 2002 and figures in the fight against corruption in the country.
How did we get there? The Minister is quite discreet on this very sensitive issue, as these conventions were signed under the regime of his predecessor, the current Burundian head of state. Pierre Nkurunziza was recently elevated to the rank of “Supreme Guide of Patriotism” in the country, while General Évariste Ndayishimiye makes sure to “follow in the footsteps” of what he calls “the nation’s grandfather”.
“We warned as soon as these contracts were signed because they were signed in total opacity, there would have been no call for tenders according to law (…). There are also many allegations of corruption in every contract, “recalls the president of Olucome, who welcomes this” decision to repeal these agreements pending the adoption of a new code and renegotiation of these conventions, as the country saw its minerals expire. without taking the slightest advantage of them ”.
#Burundi: Following the announcement by President @GeneralNeva on July 1, 2021, all mining companies were suspended yesterday, July 13, 2021, pending the new mining code and renegotiation of new agreements based on the 1/4 win-win principle. twitter.com/JRx6vVH28N
– OLUCOME Burundi (@olucome_burundi) 14 July 2021
According to confirming sources, “it was President Pierre Nkurunziza personally who gave his agreement for the granting of an exploration or mining permit”. But the applicant had to go a real way off the cross, because he had to be sponsored by one of the “generals” of the system, then have the approval of the minister responsible for mines and the president’s head party, CNDD-FDD, and at every step he had to pay.
“The presidency was not called corruption, but the investor had to contribute millions to an account entitled” Support for Good Initiatives “by the President and to the” Ubuntu Foundation “for the First Lady,” according to a senior Burundian executive at the time. on condition of anonymity.
“This parallel system of legalized extortion of funds has resulted in the signing of contracts that do not take into account the interests of the country,” the Olucome president lamented.
“We can not be satisfied with 10%”
But things have changed since his successor, General Evariste Ndayishimiye, came to power in June 2021. This man in seraglio was considered “pure” and has fought against the appearance that plagues Burundi as his priority and the development of land now classified as the poorest in the world. He does not hesitate to attack the “plunderers of the people” whom he describes as “brigands” and other “villains” who “have stolen the wealth of the land” without ever mentioning them.
“His problem today is to change things, put an end to this whole corrupt system, without impairing the memory of his predecessor and the image of the party in power,” analyzes the same former executive and estimates that “it will be very, very difficult, because no one is under any illusions about this issue ”.
Its aim is therefore to renegotiate all contracts with major international companies in the mining sector before we soon attack Burundian’s semi-industrial mining companies and then the thousands of small craft mines, according to Minister Ibrahim Uwizeye.
“Ultimately, every person who uses our minerals must earn a reasonable price for their work, but also that Burundi receives a fair income from what really corresponds to its contribution,” the minister said. “The current conventions are too much to the detriment of the country. Our duty today is to suspend the exploitation of the mines so that the contracts can be renegotiated, because we are the owners of the subsoil and as such can not be satisfied with only 10% “, insists again and shows determination.
But the new Burundian president must be aware of the many Burundians who belong to the circles of power and who have interests in all these societies, our sources in his entourage explain. “Some senior officials, including generals, own shares or are in some way associated with some of these companies, and they are angry, we feel some tension,” said one of them.
In Burundi, “generals” is the common term denoting a group of about ten generals from the previous Hutu uprising of the CNDD-FDD today in power, and who actually have power. Some of them are among the richest men in the country, after 16 years in power.
“The government must be careful in renegotiating contracts and avoid breaking them unilaterally as it risks being sued by international arbitration bodies. And it must also provide itself with good negotiators, otherwise it has been for nothing,” warns the president of Olucome. .
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